Last December, the Remote Gambling Association (RGA) filed a formal complaint with the European Commission alleging discrimination by the United States in its internet gambling practices. The complaint centers around European internet gambling companies being shut out of the U.S. market while the United States “allows domestic online gaming operators, primarily horse betting, to flourish.” Poker News Daily has learned that the European Commission is scheduled to visit Washington, D.C. this month.
Clive Hawkswood, Chief Executive for the Remote Gambling Association, told Poker News Daily,
At the moment, there appears to be a clear discrepancy between the European Union’s interpretation of the U.S. commitments under the GATS Treaty and that of the U.S. Trade Representative and Department of Justice. If nothing else, the European Commission will want a better understanding of how and why the U.S. believes it can take discriminatory and retrospective enforcement action against E.U. interests.
GATS stands for “General Agreement on Trade in Services” and is designed to lessen trade barriers worldwide. The RGA claims that the United States effectively shut its borders to internet gambling after passage of the Unlawful Internet Gambling Enforcement Act in October, 2006. The law forced companies such as Party Gaming and 888, both publicly traded on the London Stock Exchange, to abandon the market entirely. In the process, shareholders lost millions of dollars.
In March, the European Commission launched a formal investigation, which included sending a questionnaire to the office of the United States Trade Representative. In August, the RGA endorsed HR 6663, a bill in the United States that would interpret the UIGEA to mean that only online sports betting is in violation of federal law. HR 6663 also grants a reprieve to any company that offered wagers to U.S. customers prior to the UIGEA’s passage, but then pulled out of the market. The move would free companies like Party Gaming from any prosecution by U.S. authorities. HR 6663 was introduced by Texas Republican Pete Sessions in July and currently has four co-sponsors. It is not supported by the Poker Players Alliance.
Ultimately, the European Commission’s investigation may result in action by the World Trade Organization. Hawkswood explained, “We are hopeful that the U.S. Trade Representative and Department of Justice will get a better understanding of why the European Union has decided to pursue this investigation. If they continue to be dismissive of the E.U.’s concerns, then the matter will likely end up being referred to the WTO.”
The European Commission is set to visit Washington, D.C., the capital of the Untied States, sometime in the middle of September. Hawkswood could not comment on the team’s itinerary, only saying that “if they can’t see USTR, then there is probably little point in them going.” The RGA represents some of the largest European gaming companies. Its roster of members includes Betfair, Party Gaming, Paddy Power, 888, Skybet, Unibet, Victor Chandler, Bet 365, Microgaming, CryptoLogic, and Ladbrokes. The organization is headquartered in London.
Other bills in the United States Congress that may help appease the RGA’s concerns include Barney Frank’s HR 2046, the Internet Gambling Regulation and Enforcement Act. The bill would establish a formal framework for legalized and regulated internet gambling in the United States. Each company that wishes to solicit U.S. customers would need to file for a license as well as pay a percentage of revenue in tax.
The United States Congress returned from its August recess on Tuesday. Another break is scheduled for campaigning as part of the upcoming general elections.
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